Wall Street bonuses safe from volatility

Wall Street bonuses will see a modest impact from recent woes in the market, according to a survey released Monday by Johnson Associates Inc.
Compensation will be hit by firm-wide financial losses from loan-related fees and write offs. Those losses will be offset by the seven- to eight-month build up of the bonus pool, the report said. Bankers also can expect to see more options in compensation packages.
Private equity professionals and investment bankers can still expect to see 20% gains in yearend compensation.
"Increases are expected across the board, varying in magnitude with mixed business results across sectors and products," Johnson said in its report. "The growing divergence in incentive pool increases and compensation levels between major firms and broader comparators continues."
Prime brokerage, hedge fund, derivative workers can expect 15% increases. Senior executives can expect 5% to 10% increases.

ThatÂ´s what I call "risk-adjusted" returns with low volatility and more then acceptable risk / reward ! Imagine all these subprime investors stuck into the failed Bear Stearns hedge funds reading this news....Ooopppppssss !!

Wall Street bonuses will see a modest impact from recent woes in the market, according to a survey released Monday by Johnson Associates Inc.
Compensation will be hit by firm-wide financial losses from loan-related fees and write offs. Those losses will be offset by the seven- to eight-month build up of the bonus pool, the report said. Bankers also can expect to see more options in compensation packages.
Private equity professionals and investment bankers can still expect to see 20% gains in yearend compensation.
"Increases are expected across the board, varying in magnitude with mixed business results across sectors and products," Johnson said in its report. "The growing divergence in incentive pool increases and compensation levels between major firms and broader comparators continues."
Prime brokerage, hedge fund, derivative workers can expect 15% increases. Senior executives can expect 5% to 10% increases.

ThatÂ´s what I call "risk-adjusted" returns with low volatility and more then acceptable risk / reward ! Imagine all these subprime investors stuck into the failed Bear Stearns hedge funds reading this news....Ooopppppssss !!

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That's a refresher I'm doing about 14 hours days and it would suck not at least break even this year compared to the last.

Absolute bologna. If the market is tough around year-end, bonuses will be slashed like crazy. Any compensation manager will answer a survey now saying bonuses are safe to calm any employee fears. It's a long haul between now and year-end and Wall St. will look for any excuse to cut bonuses just above the point where good employees leave. That's always been the case.

Management's main skill is not in fact those skills one might associate with their job title, their main skill is in fact selling those more junior the idea that their bonus will be less than they were asked to factor in, thereby keeping the bonus pool larger for the higher ups and costs down. Fact is they all work to the same bottom line and target the same ratios so for the few to get more, many must get less.

Bonuses are paid out of revenues. Revenues are going to shrink from all those postponed issuances, all those postponed mergers, all those shrinking hedge fund accounts at the prime broker, all those blow ups on the prop desk.

And lets get real here, which firm is going to tell the WSJ they are going to cut bonuses? We'll all find out after the fact.

What happens in times like these is that the *dispersion* in bonuses increases. People who just occupy space will get catfood and people who actually make the rain to fill the bonus pool will get a nice cut.

Bonuses are paid out of revenues. Revenues are going to shrink from all those postponed issuances, all those postponed mergers, all those shrinking hedge fund accounts at the prime broker, all those blow ups on the prop desk.

And lets get real here, which firm is going to tell the WSJ they are going to cut bonuses? We'll all find out after the fact.

What happens in times like these is that the *dispersion* in bonuses increases. People who just occupy space will get catfood and people who actually make the rain to fill the bonus pool will get a nice cut.

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*Average* have to come down, they can cut everyone but for sure, the executives will get their bonuses.